The reason for box 14 is: if there are two states with withholding in box 12a and 12b, (say the plan owner moved mid year), then the payer must allocate the amount of the distribution between both states in the two box 14's, the total of both box 14's will be equal to box 1. If only one state then there is no reason to enter anything into box 14 because by default, there is no other state to divide the box 1 amount with.
Financial institutions by convention, never enter anything into box 14 if there is only one state. Only NY (to my knowledge) started to reject 1099-R's with a blank box 14 last year and are doing the same this year. This appears to be a bug in the NY software that they have not fixed. The other 49 states get it right.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
